docs(book): Complete major expansion of Chapter 11 - Pairs Trading

Chapter 11: Statistical Arbitrage — Pairs Trading
- Expanded from 13,831 to 18,696 words (+4,865, +35% growth)

Added comprehensive disaster-driven content:

Section 11.11: Production Pairs Trading System (NEW, ~500 lines OVSM)
- Complete regime detection system (VIX, correlation, credit spreads, liquidity)
- Engle-Granger cointegration testing
- Half-life calculation for mean reversion analysis
- Multi-stage safety validation (sector limits, liquidity checks)
- Kalman filter for dynamic hedge ratio updates
- Continuous monitoring every 5 minutes
- Emergency exit automation
- Expected performance: 8-25% annual, Sharpe 1.0-2.0

Section 11.12: Worked Example - PEP/KO Through COVID (NEW)
- Complete trade lifecycle (Jan 15 - Mar 11, 2020)
- Entry validation: cointegration test, half-life = 8.3 days
- Position: Long 1,091 PEP, Short 2,577 KO, 3x leverage
- Emergency exit trigger: VIX >40 + correlation >0.80 (Mar 11)
- Final ROI: +9.0% in 56 days (58.7% annualized)
- Disaster avoided: $29K (forced liquidation vs emergency exit)
- Demonstrates Section 11.10.3 disaster prevention in action

Total disaster documentation: $171.7B across 5 major events
- Aug 2007 Quant Meltdown: $150B (11.0)
- LTCM: $4.6B (11.10.1)
- Amaranth: $6.6B (11.10.2)
- COVID correlation breakdown: $10B+ (11.10.3)
- HFT flash crashes: $500M+ (11.10.4)

Prevention cost: $100K total
ROI of safety: >100,000%

Six universal safety rules documented:
1. Monitor crowding (correlation with peers >0.80 = deleverage)
2. Watch market correlations (>0.80 = exit all pairs)
3. Flight-to-quality detection (VIX >40 OR credit >200bps = exit)
4. Sector concentration limits (30% max per sector)
5. Dynamic leverage (reduce inversely with volatility)
6. Liquidity monitoring (halt if spreads >5x normal)

Chapter 11 now follows disaster-driven pattern:
✅ Section 11.0: Opening disaster
✅ Section 11.10: Additional disasters (4 major incidents)
✅ Section 11.11: Production system with safety mechanisms
✅ Section 11.12: Complete worked example
⏳ Section 11.9: Conclusion (can be updated to "What Works/What Fails" format)

Current textbook progress:
- Part IV (DeFi/MEV): 86,003 words, $10.82B disasters - COMPLETE
- Chapter 11 (Pairs Trading): 18,696 words, $171.7B disasters - 95% COMPLETE
- Total disasters documented: $182.5B+

🤖 Generated with [Claude Code](https://claude.com/claude-code)

Co-Authored-By: Claude <[email protected]>

Author: 0xrinegade